Brands Are Missing Out on Thousands in Uncollected Ad Music Royalties

As YouTube vlogger Joe Wicks found out earlier this year, copyright surrounding music is a complicated beast. The Body Coach – who shot to fame during lockdown – was forced to conduct his workout sessions without backing music after he was initially banned from playing George Ezra tracks by the musician’s record label, until Ezra’s mum stepped in.

The complexities around music copyright laws are further exacerbated by the fact that the law differs depending on where you are in the world. Just this last week we read about the longstanding rift over music royalties between Britain and America, with artists on both sides of the Atlantic reportedly being denied millions of dollars when their music had been played on radio stations, in bars and pubs, and even within TV commercials.

While this is in part due to the differences in UK and European law versus US law, this does highlight a significant problem within the music industry, and in particular, within the advertising industry – a vast shortfall in income for composers, musicians and brands, many of whom are missing out on receiving royalties for music that they created.

Brands spend millions of dollars every year crafting the perfect campaigns to create connections and drive actions from consumers, and music is a crucial element of these campaigns, recognized for its emotional and engaging qualities. Advertising soundtracks are often bespoke compositions created specifically for the brand and its advertising campaign, resulting in the brand often owning some or all of the publishing rights to the track. However, in most instances, they are not actively collecting these royalties, if they are even aware that they can.

Unbelievably, we estimate there is over $500m of performance royalties a year available for music used in advertising, and yet barely a fraction of this is claimed back, leaving brands, their agencies and the composers considerably out of pocket.  Not only is this a valuable opportunity for brands to recoup significant amounts of money from existing media spend, at a time when marketing budgets are under threat, but it’s also an opportunity to ensure that those composers, musicians and artists in their supply chain are being fairly paid for the music they have created.

So what is the solution?

The advertising industry has gone through significant change in recent years, thanks in part to innovative technology and the availability of multiple data sources, and these elements are now also dramatically simplifying the process of music tracking.

The application of Big Data now makes it possible to automatically monitor where and how often brand TV advertisements are being played, enabling Collection Societies to ensure the accurate distribution of royalties to brands, agencies and composers.

To put this in perspective, we have worked with a global travel brand for a number of years, who prior to our appointment had been receiving around £25,000 annually in royalties from commercials internationally but recouped only in the UK.  However, through the application of technology and data-led solutions, the brand and composer royalties grew to over £800,000 per year which included payments from over 25 international markets.

The truth is, technology and data solutions can deliver unsurpassed results for brands by ensuring accurate music reporting of advertisements across the globe, benefiting not just the brands themselves but the composers they work with. And with two thirds of musicians facing financial hardship as a result of COVID restrictions, there has never been greater urgency for brands to recoup the money owed.